Energy Prices Will Be About the Same This Winter

As winter approaches, forecasters predict the weather in the U.S. will be a little colder this year, but energy costs will be about the same as last year.

The Energy Information Administration (EIA) at the U.S. Department of Energy issued its winter forecast recently stating most U.S. households will spend about the same or less on energy than they did last winter.

“Generally, retail energy prices in our forecast are less than they were last winter, but temperatures across much of the country are set to be colder this year, meaning homes will use more energy for space heating,” EIA stated. “The combination of lower prices and colder weather results in relatively little change in expenditures.”

Natural gas is the largest energy source to generate electricity and heat homes and businesses. EIA said the Henry Hub natural gas spot price will average around $3.10 million British thermal units (MMBtu) in 2025.

EIA estimated the cost of energy across the U.S. and said the South will have the lowest cost at $487 followed by the West at $573 and the Midwest at $586. The Northeast had the highest estimated cost at $772.

Fuel inventories are an important source of winter supply, and natural gas and propane currently have high inventories compared with their previous five years (2019–2023). “These relatively high inventories have helped keep prices for those fuels below year-ago levels,” EIA stated.

“We assume this winter will be colder than the last winter across much of the country, especially in the Midwest,” EIA stated. “Our assumption is that temperatures this winter will be closer to average following a very mild winter last year.”

Weather can affect household heating expenses in two ways, EIA said. “First, cold weather raises the amount of energy required to keep a house at a specific temperature. Second, because cold weather raises aggregate demand and can disrupt supply, it can cause energy prices to rise. These price increases can be more severe if fuel inventories are relatively low.”

In a separate report, EIA reduced its forecast for the price of crude oil. EIA said Brent crude oil, which is traded internationally in London, will average $78 per barrel (b) in 2025, $7 less than expected in last month’s forecast. West Texas Intermediate, which is traded on NYMEX, generally brings $3-$5 less than Brent. EIA does not issue a forecast for WTI.

Alex Mills is the former President of the Texas Alliance of Energy Producers.